Transaction Details

Wisconsin Health and Educational Facilities Authority (Milwaukee School of Engineering)

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On June 23, 2021, Baird served as Sole Managing Underwriter for the Milwaukee School of Engineering (“MSOE”). The purpose of the Series 2021A Bonds was to advance refund the Series 2012 Revenue Bonds. The purpose of the Series 2021B Bonds was to finance projects at the main campus, including constructing a new admissions/student welcome center, replacing broken tiles on the façade of the Campus Center, replacing air handling units in the Campus Center, replacing the roof of the Campus Center and creating a comprehensive student services center. The Bonds were issued through the Wisconsin Health and Educational Facilities Authority to lower the costs of issuance and achieve double tax-exempt status in Wisconsin for the Series 2021B Bonds.

Baird worked with MSOE to secure its first public underlying rating of “A-/Stable” from S&P. MSOE was able to obtain bond insurance from Assured Guaranty Municipal Corp. (“AGM”) lowering the interest rates on the Bonds and achieving an additional rating of “AA” due to the insurance, the only insured private higher education transaction done in 2021 at the time of pricing. AGM also provided a surety bond to fund the Debt Service Reserve Fund (“DSRF”) requirement.

Baird’s banking team worked with its local retail financial advisory teams to generate awareness and educate potential retail investors of the offering through various marketing tools including an investor presentation and an internal sales memorandum highlighting key components of the financing. Due to the internal marketing campaign and the double tax-exempt status, 100% of the Series 2021B Bonds were sold to retail investors.

During pricing, the Bonds were well-received. Overall, the order period resulted in $50,585,000 in orders (or 1.7x the par amount) with oversubscriptions in individual maturities up to 3.1x. MSOE’s true interest cost was 2.31% for the Series 2021A Bonds and 2.26% for the Series 2021B Bonds.

As a result, the Series 2021A Bonds captured present value savings of $1,248,729 (6.48% of the refunded par amount), the Series 2021B Bonds generated $10 million in project funds, and the Bonds were structured to achieve the goal of combined level overall debt service.